Britain’s biggest telecom BT Group PLC has suspended its dividend, one of the biggest on the London Stock Exchange, until the 2021-2022 fiscal year and pulled its financial outlook in response to the COVID-19 pandemic.
The company said that the cash saving would bolster it through the expected financial crash that would lead to lower revenue from sports customers, reduced business activity and more cautious spending by multinational customers.
On the same day that rivals Telefonica SA and Liberty Global PLC announced the merger of their British units to build a stronger challenger, BT also set out plans for a new five-year program to modernize the business.
Photo: Reuters
The new program would cost £1.3 billion (US$1.61 billion) to achieve and would deliver annualized gross benefits of £2 billion by March 2025 as it switches off many legacy programs and uses new technologies to improve.
“Of course, COVID-19 is affecting our business, but the full impact will only become clearer as the economic consequences unfold over the next 12 months,” CEO Philip Jansen said. “Due to COVID-19, BT is not providing guidance for 2020-2021 at this time.”
It said it expected to resume dividend payments at £0.077 per share. In the 2018-2019 fiscal period it paid a full-year dividend of £0.154.
Jansen has been tasked with building nationwide gigabit fixed and mobile networks, while trying to shore up revenue and earnings in the short term.
The company yesterday said that it was working to build its fiber to the home network to 20 million premises by mid to late this year, on the assumption that it secures the right regulatory approval.
It said its 2019-2020 fiscal year results were in line with expectations.
In other news, Telefonica and Liberty Global yesterday announced that their British units — Internet supplier Virgin Media Inc and mobile phone carrier O2 — plan to merge and create a big new telecom provider in the UK.
The parent companies valued the new company at £31 billion.
Telefonica CEO Jose Maria Alvarez-Pallete said that “combining O2’s No. 1 mobile business with Virgin Media’s superfast broadband network and entertainment services will be a game-changer in the UK.”
O2 is the UK’s largest mobile phone company with about 34 million users. Virgin has more than 5 million subscribers to its broadband and cable television services.
Additional reporting by AP
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday obtained the government’s approval to inject an additional US$7.5 billion into its US subsidiary, the Department of Investment Review said in a statement. The department approved TSMC’s application of investing in TSMC Arizona Corp, which is engaged in the manufacturing, sales, testing and design of IC and other semiconductor devices, it said. The latest capital injection follows a US$5 billion investment for TSMC Arizona approved in June. The chipmaker has broken ground on two advanced fabs in Arizona with aggregated investments approved by the department totaling US$24 billion thus far. According to TSMC, the first Arizona
The lethal hack of Hezbollah’s Asian-branded pagers and walkie-talkies has sparked an intense search for the devices’ path, revealing a murky market for older technologies where buyers might have few assurances about what they are getting. While supply chains and distribution channels for higher-margin and newer products are tightly managed, that is not the case for older electronics from Asia where counterfeiting, surplus inventories and complex contract manufacturing deals can sometimes make it impossible to identify the source of a product, analysts and consultants say. The response from the companies at the center of the booby-trapped gadgets that killed 37
FRIENDLY TAKEOVER: While Qualcomm Inc’s proposal to buy some or all of Intel raises the prospect of other competitors, Broadcom Inc is staying on the sidelines Qualcomm Inc has approached Intel Corp to discuss a potential acquisition of the struggling chipmaker, people with knowledge of the matter said, raising the prospect of one of the biggest-ever merger and acquisition deals. California-based Qualcomm proposed a friendly takeover for Intel in recent days, said the sources, who asked not to be identified discussing confidential information. The proposal is for all of the chipmaker, although Qualcomm has not ruled out buying some parts of Intel and selling off others. It is uncertain whether the initial approach would lead to an agreement and any deal is likely to come under close antitrust scrutiny
SECURITY CONCERNS: The proposed ban on Chinese autonomous vehicle software and hardware would go into effect with the 2027 and 2030 model years respectively The US Department of Commerce today is expected to propose prohibiting Chinese software and hardware in connected and autonomous vehicles on US roads due to national security concerns, two sources said. US President Joe Biden’s administration has raised concerns about the collection of data by Chinese companies on US drivers and infrastructure as well as the potential foreign manipulation of vehicles connected to the Internet and navigation systems. The proposed regulation would ban the import and sale of vehicles from China with key communications or automated driving system software or hardware, said the two sources, who declined to be identified because the